Sanofi Profiles Zalicus Drug Today, a Positive Sign for Investors

 |  Includes: AMGN, EPRS, NVS, SNY
by: James Stocklasar Thomas Jr.

A sign of good news on the horizon? On Wednesday 23 March 2011, Sanofi (NYSE:SNY) profiled Prednisporin (FOV1101), licensed from Zalicus Inc (ZLCS), as one of its lead Phase 2 drugs in its new ophthalomology division. Earlier this year, Sanofi announced the creation of its new ophthalmology division. Prednisporin (FOV1101) has been a promising drug stallion in Sanofi's new opthalmology stable.

Since early November 2010, Zalicus investors have been waiting for a full report on the completed Phase 2B study. On the launch of a Phase 3 clinical study, Zalicus will receive a $3 million milestone. It would be further validation of Zalicus's cHTS technology (i.e. combination high-throughput screening) to combine approved drugs for new and synergistic purposes. Prednisporin treats allergic conjunctivitis and in earlier clinical studies met efficacy targets with little to no side effects.

Like Prednisporin, a synergistic-empowered low-dose steriod but without the steriod side effects, Zalicus also has a reformulated once/day version of Synavive entering a Phase 2B study sometime in the second quarter 2011. Synavive is targeting rheumatoid arthritis and osteoarthritis and may have other applications for later product development. My understanding is, if it reaches market, Synavive could garnish 300-400 million dollars in revenue per year.

cHTS, a proprietary technology of Zalicus Inc. has been a key revenue driver to the corporation such as its recent extended-contract with Novartis (NYSE:NVS) and its continuing relationship with Amgen (NASDAQ:AMGN) that began as a pilot program. Last year, the company undertook a contract with the "U.S. Army Medical Research Institute for Infectious Diseases (USAMRIID) for the research and discovery of potential treatments for viral hemorrhagic fevers (VHFs)."

Clearly, today's news release from Sanofi has re-awakened Zalicus investors to the promise of Prednisporin, known to shareholders as the BIG RED pain and inflammation reliever for chronic allergic conjunctivitis.

Disclosure: I am long ZLCS.